- 2 months ago
On this week’s episode of RealTrending, Tracey Velt sits down with Lennox Scott, the CEO of John L. Scott Real Estate. Lennox has been in the industry for almost 50 years, and John L Scott is a family brokerage with a rich 94-year history.
Lennox talks about how AI is reshaping industries, the critical role of MLS consolidation, and maintaining personal relationships in a tech-driven world. He also discusses the challenges posed by institutional investors and strategies brokerages can adopt to stay relevant in an AI-enhanced future.
Here’s a glimpse of what you’ll learn:
Team culture, continuous learning, and strategic meetings are important for brokerage relevance.
The benefits of a national MLS and AI in enhancing data infrastructure and efficiency.
The importance of full inventory access and the challenges of shadow MLSs.
How to work with AI tools to focus on trusted relationships and personal representation.
The impact of institutional investors on housing markets and potential legislative solutions.
Related to this episode:
John L Scott
https://www.johnlscott.com/home
Lennox Scott | LinkedIn
https://www.linkedin.com/in/lennox-scott-6534624
HousingWire | YouTube
https://www.youtube.com/channel/UCXDD_3y3LvU60vac7eki-6Q
The RealTrending podcast features conversations with the brightest minds in real estate. Every Monday, brokerage leaders, top agents, team leaders, and industry experts join us to share their secrets to success, trends, and the lessons they’ve learned. Hosted by Tracey Velt and produced by the HousingWire Content Studio.
Lennox talks about how AI is reshaping industries, the critical role of MLS consolidation, and maintaining personal relationships in a tech-driven world. He also discusses the challenges posed by institutional investors and strategies brokerages can adopt to stay relevant in an AI-enhanced future.
Here’s a glimpse of what you’ll learn:
Team culture, continuous learning, and strategic meetings are important for brokerage relevance.
The benefits of a national MLS and AI in enhancing data infrastructure and efficiency.
The importance of full inventory access and the challenges of shadow MLSs.
How to work with AI tools to focus on trusted relationships and personal representation.
The impact of institutional investors on housing markets and potential legislative solutions.
Related to this episode:
John L Scott
https://www.johnlscott.com/home
Lennox Scott | LinkedIn
https://www.linkedin.com/in/lennox-scott-6534624
HousingWire | YouTube
https://www.youtube.com/channel/UCXDD_3y3LvU60vac7eki-6Q
The RealTrending podcast features conversations with the brightest minds in real estate. Every Monday, brokerage leaders, top agents, team leaders, and industry experts join us to share their secrets to success, trends, and the lessons they’ve learned. Hosted by Tracey Velt and produced by the HousingWire Content Studio.
Category
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NewsTranscript
00:00With so much changing in real estate, what does the brokerage of the future look like?
00:04I spoke with Lennox Scott. He is the CEO of John L. Scott Realtors.
00:08And we had a great conversation about MLS consolidation, AI, and what the future of the brokerage,
00:15what a brokerage will look like in the future. So stay tuned and enjoy the podcast.
00:21Lennox, I really appreciate you being on the Real Trending podcast today. So welcome.
00:26Well, thank you, Tracy. Thank you for the invitation. I listen to every one of your podcasts.
00:32I appreciate that. And I appreciate all of the emails, too.
00:36Lennox has sent me many different great ideas for stories and that some of our reporters have followed up on as well.
00:43So thanks so much.
00:45You bet.
00:45Yeah. So you're a third generation leader, long, longstanding brokerage and pillar of the community.
00:53And so what are you doing to stay relevant, having such longevity in the business and that your brokerage has had such longevity in the in the area as well?
01:05Well, that's a very good question to ask, because we're 94 years old as a company, and this is my 49th year in the industry.
01:13But it really comes down to our team environment, our agents, our office leaders, support team, our service center.
01:21It's all of the positive spirit each of us bring to together to make us who we are.
01:26And a big part of the culture is we continually seek out information to be relevant.
01:34We, you know, I listen to your podcast.
01:37I listen to other podcasts on economics.
01:39We read five newsletters a day.
01:43We go to conferences leading real estate companies in the world.
01:47We just collaborate.
01:48We're involved with the realtors, hearing information and sharing through that.
01:54So and then we take all that information and we have strategy meetings in the company every month on major topics such such as everyone productive, the current market for both buyers and sellers.
02:09We have selective recruiting, AI, everything.
02:12That's one of one of our main topics that we get involved with.
02:16And so by having those strategy meetings, we're not just observing and knowing things are going on.
02:22We're actually talking about them, coming up with action plans.
02:27And then the key word is sense and track how we're doing on those items.
02:31So that's how we keep relevant.
02:34I mean, it sounds easy, but it's not.
02:36You know, I think a lot of people go to the events or read things, listen to things, but they're missing.
02:43And they might even talk to their leaders about it, but they're missing kind of that next step in, you know, choosing to implement or choosing to, you know, get more involved in or developing an agent committee to talk about it, whatever it is.
02:57You know, so it it is.
03:00It sounds like I said, it sounds easy, but it's really not an easy thing to do.
03:05It takes years to really hone it.
03:07Don't you agree?
03:08Well, I sure do.
03:10And you really bring up a good item there with our agents.
03:13I'm in an office meeting one or two a week, talking with our agents, presenting concepts to the nuances of what we're moving forward.
03:23But then having focus groups with office leaders and agents.
03:27And I run a top producer mastermind group.
03:30So I'm hearing what's going on in the street, as well as the rest of our executives.
03:34So we can throw those items into the mix.
03:37Yeah.
03:38And so you said 49 years in the business.
03:40So when you look back kind of at your career, what are those pivotal moments that you have had that maybe shaped you as a leader or shifted the company's trajectory or perspective?
03:54Well, well, growing up, of course, family, my parents, grandparents, coaches, teachers, just our team here at John O. Scott and the industry, all those have made an impact in my life.
04:10But for me, for leadership, you know, I just grew up as an Eagle Scout.
04:17I was a co-captain of the football teams.
04:20I was actually a homecoming king.
04:22My parents taught me to put my hand out in friendship to everyone, which I do and I enjoy.
04:28And then fraternity, president, and then getting into the company and collaborating with the team.
04:33So all those things come into play.
04:36But some really key items was my dad introduced me to personal achievement seminars.
04:42The first one was called the Pacific Institute.
04:44It's about positive affirmations on who you are, where you want to be, but bringing it forward today of who you are in that future being.
04:56And then the other one was later on, I went to a class called Landmark Education.
05:01And again, it was just about creating a life you love.
05:05And going through these personal achievements seminars, I seem to go through one every decade, but it's just being present and determining what's important to you.
05:16And, of course, personal faith really plays a part.
05:21Yeah, as a leader, being present is extremely important.
05:25And I love all of the I listen to mindset and, you know, a lot of podcasts on leadership and mindset and really even personal growth and how it relates to that and spiritual growth as well.
05:42And I just find that it's such a I don't know it to me, it makes all the difference in whether you love what you do or not.
05:51Yes. And, you know, I like to look at things it affirms, but it also takes you through a renewal spirit.
06:00You know, when you go to a seminar, a conference, national real estate coaches, all of those is a chance.
06:08And I go to them all is renewal of spirit and re-energize as we move forward.
06:14Yeah, absolutely. Absolutely.
06:16So we're going to talk about MLS consolidation.
06:19You recently were featured in one of our Housing Wire articles on it.
06:23You've been a vocal advocate for MLS consolidation.
06:26And you said, I don't have another 25 years to wait.
06:30So what do you think is the single biggest barrier slowing consolidation down?
06:35And what do you think is the solution?
06:38Well, it's it's great what we've accomplished over the last 25 years.
06:42So it really got into the conversation about 25 years ago at A.E.
06:47Institutes and such.
06:49We ended up consolidating our five MLSs in Seattle in 1985.
06:54How many years ago?
06:5540 years ago.
06:57Yeah.
06:57And what a difference that that made in in our industry.
07:01But what we're seeing now is it's not really roadblocks anymore.
07:07It's actually what's going to happen in the future that's really going to drive the consolidation.
07:13And of course, that's the A.I. world, everything.
07:16Now we can get to a national MLS A.I. data infrastructure.
07:22And it might is probably going to be by state or whatever.
07:26But but the possibility is you could just do it nationwide with A.I.
07:29But it will be hopefully done by state.
07:32And we can we still respect the local realtor association, the local membership, local government affairs.
07:40All those things are in play.
07:43And because there are so so many in this businesses looking at the real estate industry, we can make this change within the industry right now and change up the whole data infrastructure with the use of A.I.
07:59Because what we want is we want to get information delivered from one source every nanosecond pushed to us right now.
08:08We did have consolidation.
08:10I'm not in 17 MLSs anymore.
08:12I'm only in 14, but it still costs hundreds of thousands of dollars a year for me.
08:18And that's not the tens of millions that it costs them to do the data.
08:23We can consolidate that down.
08:26We can rotate the great individuals working in MLSs over into governmental affairs or other divisions where we can reallocate our resources and the talent that's being used throughout our industry.
08:42Volunteer members, you know, get them freed up so we can do some other items.
08:47Yeah, I just remember when I just remember when I first started in the industry, it was, gosh, 90, 91.
08:56I remember when Realtor.com came on the scene and everybody talked about it being a national MLS.
09:02And I think I believe they made it clear it was not going to be a national MLS.
09:07But it made sense for it to be, I think, in most people's minds that NAR would just consolidate everything up into Realtor.com.
09:16Obviously, we know what happened with that and all the changes from there.
09:23But there's also tension between local associations who are protecting their MLS territory.
09:29And kind of the industry's need for efficiency is in direct competition with that.
09:34So how do you break that stalemate and not lose the local expertise but get the consolidation that's necessary?
09:43Well, and that's where local membership and local governmental affairs come in.
09:48So our MLS, you know, the Northwest MLS up here, which covers the majority of the state of Washington,
09:56but they help support Realtor issues at the local associations, which is fabulous.
10:03So we get the economies of scale, but more particularly, we get the technology advancements.
10:11And boy, are we ever have to get out in front of this right now in the AI world where we still are involved with the MLSs
10:20instead of someone else out there being involved.
10:23The other things is just looking at a on a state level of, you know,
10:28the states can now do some things for the local MLSs, again, for efficiency of costs and processes and such,
10:37such as they can do the dues collection, the accounting.
10:41Maybe they coordinate the education.
10:44They coordinate the local governmental affairs specialists.
10:47Because I think we have like seven local governmental affairs specialists in the Northwest on a local level
10:53because of this consolidation, freed up those valuable resources.
10:58I'm figuring we spend $1.6 billion a year on MLSs and Realtor associations nationwide.
11:05Well, we can reposition those resources in valuing ways to support the industry and more particularly homeownership in America.
11:15Yeah, absolutely.
11:16We're going to talk about a controversial issue right now.
11:18In fact, I just published an article, a contributor opinion piece, I want to say.
11:23About how clear cooperation is an antitrust lawsuit waiting to happen.
11:28It was designed to kind of level the playing field.
11:31And but there are a lot of brokers who argue that it doesn't serve clients.
11:36So what's your take?
11:38And should the policy kind of evolve along with MLS consolidation?
11:43Well, I believe in 100 percent seller representation, 100 percent buyer representation.
11:47I believe in buyers having full access to all the inventory and sellers getting the best price for their house,
11:55which all the data has been proven with full exposure.
11:59In looking at this with the MLSs, they're creating what I call shadow MLSs now.
12:10We're starting to see that around the nation.
12:13But I joined the MLS and everyone joined the MLS with eyes wide open that this was an information exchange.
12:19It was to support buyers and sellers and agents who have client relationships.
12:26That's what it was designed for.
12:28It's free access to all buyers to be able to see everything available for sale.
12:33So the shadow MLS is contrary to how we we totally exchange information with each other.
12:45Sellers can put their home line in any different format they want with any different company.
12:49So there's no restriction on that.
12:52And it's just a better system.
12:55But in a greater than that, we now have we have to look out for fair housing by limiting supply.
13:05That's that's a fair housing situation within a shadow MLS.
13:10They're saying now they'll share the information with others.
13:13Well, they're just sharing it within their group around that individual home and geographical area.
13:18Well, there might be other buyers that don't even know about it,
13:22or there might be buyer representation agreements with buyers and those agents don't know about it.
13:28And so that's not fair access to that information.
13:33So there could be definitely problems on that, which we don't want to see.
13:38The Fair Housing Act was in 1968, 57 years.
13:42We don't want to go backwards.
13:44We make great progress.
13:45We got a long ways to go.
13:47But fair housing is extremely important and realtors stand up for fair housing.
13:52Yeah.
13:52And you had said that you the one thing you didn't believe in was that the 24 hour rule
13:57and then the coming soon should be really very specific as well.
14:02Correct.
14:04Yeah.
14:04Yeah.
14:05I'd like to share a little bit about the 24 hour rule.
14:07It first came about about 30 years ago, it feels like, because there was a technology change.
14:13Computers came out, but not every company had the computers.
14:16So they still mailed their information into the MLS and they had 24 hours to get the information in.
14:22Well, we've kind of gone by that a little bit.
14:24Everybody's got computers to be able and all the forms are online.
14:28And that's just another way of restricting information to all buyers at the nanosecond.
14:35We're at the nanosecond now.
14:38Technology has gone so far beyond where we were 30 years ago.
14:41There's no need for the 24 hour rule.
14:44We have a item up here in the Northwest MLS.
14:48No marketing or showings until active live in the MLS.
14:52Active live.
14:53You push the button, it's active live.
14:55It's good to show, it's good to market at that point.
14:58Of course, that's where we should be as an industry.
15:01And the coming soon, I like the concept of coming soon because it builds inertia to be able to alert to all buyers that are homes available, to all agents that are homes available.
15:13But they have this double secret thing going on is once the listing broker shows it, then it's available to everybody.
15:21Well, that's not advanced notice of when it's actually going to be available to show.
15:26It's kind of like the 24 hour rule that we should have a specific date and time that is going to go active live.
15:33And in some multiples, we do delayed showings.
15:37We'll launch it on a certain day.
15:39But we say, with the seller's permission, when it's going to go available for showings, a day and when it's going to go available and time it's going to go available for showing.
15:49So those are just some of the items.
15:52I've got one more item I really want to share.
15:56Please do.
15:56We want national IDX.
15:58We give it to everybody.
16:00Our corporations are so huge, they have the resources to be able to do it, such as Zillow, Realtor.com, Homes.com, Rocket Redfin.
16:09Well, why don't we have it, our individual agents on the street?
16:14I got it.
16:15They can only show homes where they have a state license for that state.
16:19But we have the client relationship.
16:22That trumps everything out there.
16:24Why don't we allow agents on the street to have national IDX and real estate companies to have national IDX?
16:31That gets back to this MLS AI data infrastructure.
16:36We need to redo the infrastructure in America for information, and that will supply us with national IDX.
16:44Yeah, absolutely.
16:46And we're going to talk a little bit about AI because, you know, one of the questions I had was like,
16:52what do you think the brokerage of the future looks like?
16:55So, you know, we've had a lot happen in the last year with lawsuits and now this controversy over clear cooperation and just a lot of upheaval.
17:03The market hasn't been exactly pristine either.
17:07So, what do you think the brokerage of the future should look like and be prepared for?
17:15Yeah.
17:16Tracy, I just need to step back for one second on the MLS.
17:21Sure.
17:21Another rule is the privacy.
17:24There's lots of conversation around privacy.
17:25Well, we already have the rules in place where you don't have to put a name in, a seller's name or an address.
17:32It shows up on the map in the middle of a lake.
17:35You can do by appointment only.
17:38Everything's, you know, protected in there for privacy.
17:42And these private, these shadow MLSs, you know, they deal with a certain amount of brokers and they say, well, we don't count days on the market.
17:51Well, once they put it on the market, because I heard the vast, vast, vast majority end up going on the market in the MLS from the shadow MLSs.
17:59Well, they're dealing with the same agents when it goes on the MLS.
18:03They all know psychologically it's already been on the market.
18:06So they kind of threw away that issue of days on the market, and especially in today's world with buyer representation agreements.
18:15We're recommending to all of our buyer reps that represent our clients that they do a buyer CMA because a listing price is just the asking price,
18:25especially when you get a market change like we've had since March 21st of this year, 2025.
18:32You do a buyer CMA.
18:34So then they can get into negotiation to figure out what the real price is on that.
18:39So some of these things are out there.
18:42So let's take a look at the company of the future.
18:45Yes.
18:45AI Everything World.
18:47Just like you're saying, Tracy.
18:49Yeah.
18:50How exciting.
18:52You know, we're going to have the transaction center.
18:54We're going to have the marketing center.
18:56And we've been working on all these things for a year.
18:59We've had transaction coordinators since 2002 in the company.
19:04Now it just gets expedited.
19:07And the amount of business they can do and communication with everyone, just very exciting.
19:12All the information at the nanosecond.
19:14But, you know, we do have a saying in the company, while everything continues to change with technology, the core of our business remains the same.
19:25And that's the trusted relationship of a competent professional.
19:30That has not changed at all.
19:32And our new statement is, I partner with you as your personal representative.
19:36That's our great value of who we are in the real estate industry, both our buyers and then with our sellers.
19:45Yeah, absolutely.
19:46And when we're talking about AI, tell me a little bit about what John L. Scott is working on.
19:51And how should you frame that with, because it's about efficiency, right?
19:58So internally, operationally, it could mean jobs.
20:02Because externally, when I say external, I mean agents, it's not going to affect the agents.
20:08It's going to help them do more.
20:11So talk to me a little bit about that concept and how, what you're working on and how you're, you know, how you're thinking about it.
20:20Right.
20:20Well, being in the brokerage business, we already run very efficiently and very effectively.
20:26So we're already, this is just going to be an added support for us operationally within the company.
20:35For our broker associates, we are really focused in on their individual engagement with those in their database.
20:44And this is one of those items that's not nationwide.
20:47Because I've seen the research, 71% of buyers forget their agent's name within one year.
20:53Well, they get zero to no repeat referral business.
20:55We're up to 378,000 in our database now.
21:01And we're heading towards 500,000.
21:03I feel real good because relationships trump everything.
21:07Everyone wants a personal consultant, a personal advisor.
21:11And while we work on skill mastery, on purchase agreement, on market cycles, on representation for sellers, now it's about getting their home sold.
21:22And with buyers, it's buying the right price and terms.
21:27Those are the big items that have shifted just since March 21.
21:31So we work on skill mastery.
21:34But it's also being engaged with our clients.
21:39Yeah, absolutely.
21:40I know that in my area, I live in a neighborhood that turns over pretty quickly.
21:48And I'm always surprised because I've lived here.
21:51I worked for Florida Realtors for years in-house.
21:54And the number of agents that follow up with me or, you know, who I've worked with in the past who don't contact me or talk to me or anything.
22:08Like, I don't even know if I were to sell this house who I would go to.
22:12I have a lot of friends who are realtors, but none of them, even my friends, have done any type of follow up or communication with me.
22:22And it just surprises me knowing that I'm in the business, writing about the business.
22:27You would think that they would especially want to contact me because maybe I know people who I can refer to them to.
22:33So it's just shocking to me that that kind of they don't get the referral business or they don't their name.
22:41They don't remember their name.
22:43And it seems like it can be just so if they just had a system in place, it would be really easy for me to say, oh, yeah, so and so I'll use that person.
22:55You bet.
22:56And we're working as a team, our office leaders, our support team, executive team to flip the 80-20 rule.
23:04Yeah.
23:04The 80-20 rule is 20% implement and they get the vast majority of listings.
23:08Well, at our company, at John O. Scott, we want to help 80% plus implement and be in the top 20% of the industry.
23:16But that comes down to having a database.
23:18But more importantly, as you were bringing up, being engaged with their database on a periodic basis.
23:24We brought in a psychologist, Dr. Helen Chung, and she brought up about being present with people and having what she calls a level two communication, one of the reports that she presented.
23:38And that's a two-way communication where there's reciprocity and trust.
23:42You look out for each other.
23:44That's where business happens is being present because you look out for me just like I look out for you in life.
23:52So that's what we're focused on as a company is not just having a database, but really the engagement activities.
24:00And my daughter, Savannah, fourth generation, she'll be a great leader with her team in the company.
24:06She works with our executive team, office leader, support team agents on this one program, which is helping our agents with engagement activities with those in their database.
24:17I think it's just so smart, and especially having it as a brokerage level priority as well, because I think it could mean a lot to more productive agents, obviously.
24:30Yes. And what you were bringing up earlier about AI, yes, good producers, those that are engaged with their database, they'll be the ones doing the business because information will be at the nanosecond.
24:44And so you either need to be engaged before that nanosecond happens, or you become present in a situational activity, you know, like a service club or a networking referral group, working with attorneys, something like that, being present at the moment.
25:00Or open houses because you get to meet the neighbors.
25:04All those sorts of things come up.
25:06Yeah, absolutely.
25:07So if you could change one thing about real estate today, you could just solve one problem like that, what would it be?
25:16Well, there's so many things that come up, I guess.
25:19So the one thing I hear about all the time is the housing availability, housing supply in the nation.
25:26And they talk about they're doing a lot of things.
25:29And the answer is all of the above, because you have to do everything.
25:32And in our state, we allow ADUs, additional units on properties now, and they're starting to separate those out from the main house to be able to sell them in certain market areas.
25:45But the biggest one that isn't being talked about is getting the institutional investors out of the neighborhoods.
25:52I understand they own more than 600, maybe 700,000 homes.
25:57They really got going back in the Great Recession of 2007, 2008, 2009.
26:03The government sold them the homes, and it got them into the business.
26:06But they're turning real estate residential homes into a commodity.
26:10And it's really affecting first-time buyers and move-up buyers because now they're competing.
26:15And I'm hearing that they're now using AI.
26:17Of course they are.
26:19They're checking every listing in America to see if it's a buy or don't buy.
26:24And they checked probably 20 parameters.
26:26You know, what are the rents?
26:27What are the school scores?
26:29Job growth?
26:30What's the appreciation been?
26:32What's the environment?
26:33Political.
26:34They check everything.
26:36And that's how fast they're going to be.
26:38They're going to be at the nanosecond.
26:40Well, they should.
26:41It's causing major market manipulation in prices and upward prices and upward rent increases.
26:50They should not be allowed.
26:51They have a competitive advantage, tax advantage, on top of everything else.
26:56This is what I've also heard.
26:59So let's get some legislation passed.
27:03I hear a few states may have done this.
27:05But it's something that we should be looking at everywhere.
27:08Because they're not just going to go take a look at each listing.
27:11They're going to go homeowner direct.
27:13Where iBuyers were flipping homes, they're not flipping home.
27:16They're buying and renting at the nanosecond.
27:20So AI is to their advantage.
27:24They have tax advantages.
27:25They shouldn't be allowed to do it.
27:27Yeah, absolutely.
27:29Last question.
27:30What keeps you up at night?
27:32Just excitement for the day.
27:35I was thinking about our podcast last night.
27:38That's good.
27:39So we have strategy group meetings and we keep moving the conversation forward.
27:46I see all of us as positive advocates.
27:50But we do focus.
27:52We have some expressions.
27:54Vital few and important many.
27:56Everything's important many.
27:58The vital few I went over earlier.
28:01They're just the current market and recruiting and helping everyone be productive and expand their business.
28:08Those are the vital few that we have executive meetings every month on.
28:12Our database engagement, that's one of the vital few.
28:15I didn't mention that one earlier.
28:17So we keep focused on those while each of our departments work on their day-to-day items.
28:24We have these company major focus items.
28:27And another phrase is a frequency of focus of those vital few.
28:32That's what keeps the conversation alive.
28:35Otherwise, it disappears.
28:36Yeah, absolutely.
28:37Well, Lennox, thank you so much for sharing your expertise on the podcast.
28:42It was a pleasure having you.
28:44Well, thank you, Tracy, and all the best to you.
28:46Thanks.
28:47Thanks.
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